VAT SCHEME FOR AGRICULTURE & FISHERIES

 

This special VAT arrangement is characterized by the absence of output VAT (except in case of import, EU acquisition or reversal of taxable person). Since there is no output VAT, input VAT cannot be deducted. In order to neutralize the impact of output VAT, there is a flat-rate compensation in every operating sale: 12% for agriculture operations and 10,5% for livestock and fisheries operations. This percentage is applied to sale price of products or services, excluding indirect taxes.

REQUIREMENTS

It is applicable to the owners of agricultural, livestock, forestry or fishing farms that had not opted out this scheme, unless they had ceded the farm or were in an integrated livestock regime.

It is not applicable to activities of transformation, processing of manufacturing of natural products, sale of own products mixed with others acquired from third parties (unless they are mere preservatives), sale of products outside the farm, sports and recreational activities, sea fishing, independent livestock and accessory services that are not included in the scheme.

Trade, cooperative and agricultural processing companies can not use this special arrangement. Self-employed whose turnover in this special scheme has exceeded €250,000 in the previous year and self-employed whose turnover in other VAT arrangements had exceeded €250,000 in the previous year cannot apply it either.

WAIVER TO VAT AGRICULTURAL ARRANGEMENT

Taxpayers may waive to this special arrangement by delivering a form 036 or 037 to the Spanish Tax Office. The waiver has a minimum validity of 3 years. A taxpayer who practices a deduction of input VAT is understood to have resigned tacitly to this special arrangement.

FLAT-RATE COMPENSATION

The refund of the flat-rate compensation (12% or 10,5%, as explained above) must be paid by the recipient of goods or services. However, in case of exports, EU operations and operations provided to recipients who are established outside the territory of application oft he tax, it is made by the Public Treasury.

BEGIN OR END OF THE SPECIAL ARRANGEMENT

When an activity changes from general to special VAT scheme, the owner is obliged to pay the compensation corresponding to future deliveries of natural products already existent on the date of change.

When an activity changes from special to general VAT scheme, the owner will have the right to deduct input VAT corresponding to operating goods affected to the activity on the date of change.

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VAT CASH RECEIPT APPROACH

VAT CASH RECEIPT APPROACH

This optional special scheme allows that sales and services are recorded as revenues for VAT purposes when they are collected, deferring declaration and payment of output VAT. Consequently, input VAT can only be deducted when purchases are paid.

However, the cutoff date for the deferral is the 31st of December of the year following the performance of the operation.

SUBJECTIVE REQUIREMENTS

Cash receipt approach can only be applied to taxable persons whose turnover in the previous calendar year has not exceeded €2.000.000. To calculate the turnover, VAT law takes:

·         all sales and services,

·         excluding

o   VAT

o   Sales equalization percentage (where appropriate)

o   Sales and services provided in previous years (where appropriate),

o   Occasional supply of real estate,

o   Supply of capital goods,

o   Supply of investment gold,

o   Financial operations

Operations excluded of cash receipt approach are considered to be carried out at the time of the operation.

OBJECTIVE REQUIREMENTS

Cash approach can be applied to all operations carried out in the territory of application of the tax but for

·         operations in simplified scheme or in the special schemes of agriculture, equalization, investment gold, services provide electronically or group of entities;

·         exports and EU operations;

·         EU acquisitions;

·         operations with reversal of taxable person;

·         imports and assimilated operations and

·         own use of goods and services.

CHARACTERISTICS OF THIS SPECIAL SCHEME

VAT is accrued at the time of total or partial collection and only for the amounts actually collected. Consequently, the moment of collection must be proved.

The right to deduct input VAT arises at the time of total or partial collection, with a cutoff date of 31st December of the year following the performance of the operation.

 

 

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TRAVEL AGENCIES VAT SYSTEM

It is a mandatory VAT system in which the tax base is determined as:

• Travel Agencies support VAT on their purchases (goods and services). 
• However, the part of VAT corresponding to purchases in “benefit of the traveler” is not deductable (e.g.: lodging services provided by other companies). 
• Travel agents charge VAT in their invoices, but they do not record it separately.

REQUIREMENTS

This VAT system applies to travel agencies /tour-operators when they use goods and services provided by other companies.

Consequently, it does not apply to trips that are carried out exclusively with the travel agency’s own means of transport or lodging. In case trips were provided partly by third-parts and partly with the travel agency’s own means, it would only apply to the services provided with third-party means (DGT V3335-16).

PLACE OF EXECUTION AND EXEMPTION

Operations are considered to be carried out where the travel agency has its activity or a permanent establishment. 

TAXABLE BASE

It is calculated operation per operation, as the gross margin for the travel agency in each operation.

Notwithstanding, the General Directorate of Taxes also accepts that the travel agency declares the provisional tax base of prior year and a regularization of the tax base in the last declaration of the year (see DGT V0100-15).

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